Asia stocks fall as Europe debt crisis festers

BANGKOK — Asian stocks fell Wednesday after a meeting of Europe’s finance ministers failed to stem fears that the euro currency union is hurtling toward a breakup. Banking stocks slumped after some of the world’s top financial institutions were slapped with a credit rating downgrade.

Benchmark oil hovered below $99 per barrel and the dollar rose against the euro but fell against the yen.

Japan’s Nikkei 225 index dropped 1.2 percent to 8,376.45 and South Korea’s Kospi shed 0.7 percent to 1,841.79. Hong Kong’s Hang Seng lost 1.9 percent to 17,911.21. Australia’s S&P/ASX 200 fell marginally to 4,099.

Benchmarks in Singapore, Taiwan and mainland China were also lower. Indonesia, Malaysia and New Zealand rose.

Sentiment was dented after a meeting in Brussels of finance ministers from the 17 countries that use the euro ended without an announcement on plans to contain the debt crisis that is threatening to shatter the currency union.

The ministers sent debt-riddled Greece $10.7 billion to stem an immediate cash crisis, but they kicked more difficult issues — such as whether countries should cede some control over their finances to a central European authority — to the leaders of the European Union who meet next week.

In the latest sign of trouble, Italy was forced to pay a high interest rate on an auction of three-year debt Tuesday. The 7.89 percent rate was nearly three percentage points higher than last month, an enormous increase.

If Italy were to default on its debt of $2.5 trillion, the fallout could spell ruin for the euro common currency and send shock waves through the global economy. Such a prospect has left little appetite for risky assets.

Analysts at Credit Agricole CIB said in a report that “until concrete and detailed plans for a solution to the crisis are announced, the downward trend” in stocks will continue.

Ratings downgrades for many of the world’s largest banks also drove investors to the sidelines, analysts said. Standard &Poor’s on Tuesday lowered its credit ratings for 37 financial companies, including Bank of America Corp., Citigroup Inc. and HSBC Holdings PLC.

“The downgrade is affecting local stock market sentiment,” said Dickie Wong, executive director of research at Kingston Securities Ltd. in Hong Kong. “I believe it gives pressure on the international banking sector, and some local banks will probably be down quite a bit today.”

Hong Kong-listed Industrial &Commercial Bank of China, the world’s largest bank by market value, fell 2.3 percent. Japan’s Mizuho Financial Group lost 2 percent and Hong Kong shares of British bank HSBC Holdings fell 2.6 percent.

Insurance companies also fell. Hong Kong-listed China Life Insurance Co., the country’s biggest life insurer, lost 3.5 percent. Ping An Insurance fell 5 percent. Japan’s Tokio Marine Holdings shed 2.2 percent.

On Wall Street on Tuesday, a jump in U.S. consumer confidence sent stocks modestly higher. The Dow Jones industrial average rose 0.3 percent to close at 11,555.63. The Standard &Poor’s 500 index rose 0.2 percent to 1,195.19. The Nasdaq composite, which consists mostly of technology stocks, fell 0.5 percent to 2,515.51.

The Conference Board, a private research firm, said its Consumer Confidence Index climbed 15 points in November to 56.0 — an improvement, but still well below the level of 90 that indicates an economy on solid footing.

Benchmark crude for January delivery was down 63 cents to $99.16 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.58 to settle at $99.79 on Tuesday.

In currency trading, the euro slipped to $1.3328 from $1.3331 late Tuesday in New York. The dollar slipped to 77.88 yen from 77.93 yen.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Local News

Customers enter and exit the Costco on Dec. 2, 2022, in Lake Stevens. (Olivia Vanni / The Herald)
Costco stores could be impacted by looming truck driver strike threat

Truck drivers who deliver groceries and produce to Costco warehouses… Continue reading

Two Washington State ferries pass along the route between Mukilteo and Clinton as scuba divers swim near the shore Sunday, Oct. 22, 2023, in Mukilteo, Washington. (Ryan Berry / The Herald)
Ferry system increases ridership by a half million in 2024

Edmonds-Kingston route remains second-busiest route in the system.

Firefighters respond to a 911 call on July 16, 2024, in Mill Creek. Firefighters from South County Fire, Tulalip Bay Fire Department and Camano Island Fire and Rescue left Wednesday to help fight the LA fires. (Photo provided by South County Fire)
Help is on the way: Snohomish County firefighters en route to LA fires

The Los Angeles wildfires have caused at least 180,000 evacuations. The crews expect to arrive Friday.

x
Edmonds police shooting investigation includes possibility of gang violence

The 18-year-old victim remains in critical condition as of Friday morning.

The Everett Wastewater Treatment Plant along the Snohomish River. Thursday, June 16, 2022 in Everett. (Olivia Vanni / The Herald)
Everett council approves water, sewer rate increases

The 43% rise in combined water and sewer rates will pay for large infrastructure projects.

Robin Cain with 50 of her marathon medals hanging on a display board she made with her father on Thursday, Jan. 2, 2025 in Lake Stevens, Washington. (Olivia Vanni / The Herald)
Running a marathon is hard. She ran one in every state.

Robin Cain, of Lake Stevens, is one of only a few thousand people to ever achieve the feat.

People line up to grab food at the Everett Recovery Cafe on Wednesday, Dec. 4, 2024 in Everett, Washington. (Olivia Vanni / The Herald)
Coffee, meals and compassion are free at the Everett Recovery Cafe

The free, membership-based day center offers free coffee and meals and more importantly, camaraderie and recovery support.

Devani Padron, left, Daisy Ramos perform during dance class at Mari's Place Monday afternoon in Everett on July 13, 2016. (Kevin Clark / The Herald)
Mari’s Place helps children build confidence and design a better future

The Everett-based nonprofit offers free and low-cost classes in art, music, theater and dance for children ages 5 to 14.

The Everett Wastewater Treatment Plant along the Snohomish River on Thursday, June 16, 2022 in Everett, Washington. (Olivia Vanni / The Herald)
Everett water, sewer rates could jump 43% by 2028

The rate hikes would pay for improvements to the city’s sewer infrastructure.

The bond funded new track and field at Northshore Middle School on Thursday, Oct. 24, 2024 in Bothell, Washington. (Courtesy of Northshore School District)
Northshore School District bond improvements underway

The $425 million bond is funding new track and field complexes, playgrounds and phase one of two school replacements.

The Everett Municipal Building on Thursday, Feb. 29, 2024 in Everett, Washington. (Annie Barker / The Herald)
Everett council approves $111 million construction of sewer project

The Port Gardner Storage Facility, in the works for more than a decade, will help prevent overflows of the city sewer system.

Two students walk along a path through campus Thursday, Aug. 4, 2022, at Everett Community College in Everett, Washington. A group of nearly 20 community groups are planning to study how to make it easier for young people to find jobs. (Ryan Berry / The Herald)
Goal for Everett coalition: Make it easier for young people to find jobs

The organizations hope the months-long process will improve access to resources for young people.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.